TaxTMI 
TaxTMI 
2016 (4) TMI 42
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..... Whether the Tribunal was justified to rest its decision upon the case of Vector Shipping Services (P.) Ltd. in the facts and circumstances of Appellant's case as against the CBDT Circular No. 6/2007 dated 11/10/2007? ii. Whether the Bond Agreement/s (produced in this Appeal as Annexure 'B' and 'C') for appointing Harvesters / Transporters by the Appellant as an Agent on behalf of the Farmers constituted a CONTRACT as per the Indian Contract Act, 1872? iii. Whether the Tribunal was right in not determining the issue relating to the existence of a CONTRACT between the Harvesters/Transporters and Appellant as per the Bond Agreement/s? iv. Whether the Tribunal was justified in directing the Appellant to furnish details to the Assessing Officer for verifying whether or not the recipients of Harvesting, Transportation and Legal Consultancy payments have been respectively offered for taxation so as to determining the levy of interest in the case of the Appellant?" 5. Revenue has raised following questions of law in its appeals:- "1. Whether on the facts and the circumstances of the case and in law the Tribunal is correct in inte....
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....any tax at source and held that the same were not allowable as expenditure under Section 40(a)(ia) of the Act and accordingly, added the said amounts to the total income. 8. The assessee was called upon to produce details regarding harvesting charges and transportation charges paid in excess of Rs. 20,000/- in each case and in aggregate exceeding Rs. 50,000/- paid to various persons. Based on records and the information furnished by the assessee, it was observed by the Assessing Authority that TDS was not deducted by the assessee in respect of following payments: For the assessment year 2005-06: Sl. No. Amount 1. Harvesting charges paid above Rs. 20,000/- Rs. 60,75,515/- 2. Transportation charges paid above Rs. 20,000/- Rs. 49,74,309/- 3 Legal charges Rs. 4,27,626/- TOTAL Rs. 1,14,77,450/- For the assessment year 2006-07: Sl.No. Amount 1. Harvesting charges paid above Rs. 20,000/- Rs. 1,27,36,055/- 2. Transportation charges paid above Rs. 20,000/- Rs. 65,52,299/- 3. Harvester's commission Rs. 4,61,000/ TOTAL Rs. 1,97,49,354/- For ....
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....CIT (Appeals), Belagavi were further challenged before ITAT, Panaji Bench, Panaji. The Tribunal, by its common order dated 04.08.2015, set aside the orders passed by the CIT (Appeals) and remitted the matters to the Assessing Authority for re-adjudication on the ground that it was not proved before the Tribunal as to whether the amounts were paid before the year end. The assessee was directed to prove before the Assessing Authority that no amount had remained payable as on the year end and that all the amounts claimed on which the provisions of Sections 194C and 194J were invoked stood fully paid by the year end. It was further held that if the assessee proved that there was no outstanding and all the amounts had been paid in full then, in the light of the judgment in the case Commissioner of Income-tax, Muzaffarnagar v. Vector Shipping Services (P.) Ltd., reported in [2013]38 taxmann.com 77 (Allahabad) the Assessing Authority shall not invoke the provisions of Section 40(a)(ia) of the Act. Hence, these appeals. 12. Shri M.D. Pukale, learned counsel for the assessee urged the following contentions: (a) The agreement between the assessee and the harvester cannot be const....
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.... not have the benefit of Expert Legal Consultants to advice with regard to statutory compliance. If it is held that non-deduction of tax at source by the assessee as a violation and the payments made to the contractors are brought to tax by invoking Section 40(a)(ia) of the Act, the same shall adversely affect the profit/dividend to the members of the society. 14. The learned Counsel for the assessee also submitted that an identical matter is pending consideration before the Hon'ble High Court of Gujarat in Tax Appeal No. 2397/2009. Therefore, the questions raised are substantial in nature and require consideration by this Court. 15. With the above contentions, it was urged on behalf of the assessee to allow its appeals and to dismiss the appeals filed by the Revenue. 16. Per contra, Sri.Y.V. Raviraj, learned standing counsel for the Revenue opposing the appeals filed by the assessee and in support of appeals filed by the Revenue contended that Section 194C of the Act mandates that an assessee responsible to pay any sum to carry out any work in pursuance of contract is required to deduct tax at source. As a consequences of failure to comply with Section 194C of the Act....
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....e Hon'ble High Court of Calcutta in the case of CIT Kolkatta v. Cresent Export Syndicate reported in (2013) 33 Taxman.com 250 Calcutta and CITIV v. Sikandarkhan N. Tunvar reported (2013) 33 Taxman.com 133 Gujarat, wherein, it is categorically held that the provisions of Section 40(a)(ia) would not only cover the amounts which are payable at the end of the previous year but also which are payable at any time during the year. 21. He further submitted that the ITAT erred in relying on the decision in the case of Vector Shipping Pvt. Ltd., [2013]38 taxmann.com 77(Allahabad) when the declaration of law was clear in the cases of Crescent Export Syndicate (2013) 33 Taxman.com 250 Cal and Sikandarkhan N.Tunvar & Ors(2013) 33 Taxman.com 133 Guj. 22. He next argued that CBDT in its Circular No. 10/DB/2013 (F No. 179/Misc/M61/2012-ITJ(Vol.II) dated 16.12.2013 has clarified that the provisions of Section 40(a)(ia) would cover not only the amounts which are payable as on 31st March of the previous year but also the amounts which are payable during the years. 23. In sum and substance, the case of the Revenue is that assessee runs a sugar factory and spends crores of rupees towards ha....
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....ransporters and paid money to such harvesters/transporters in terms of such agreement/s. Records also disclose that the assessee had paid money towards rents and professional charges. Consequently, Assessing Authority as also the First Appellate Authority namely CIT (Appeals) rightly held that assessee was liable to comply with the provisions of Sections 194C, 194I and 194J of the Act and accordingly added back the income under Section 40(a)(ia) of the Act. However, the ITAT, placing reliance on the judgment of the Hon'ble Allahabad High Court in the case of Vector Shipping Services Pvt. Ltd. [2013]38 taxmann.com 77(Allahabad) held that it was not proved before the ITAT whether the amounts were paid before the year end and accordingly, set aside the assessment orders and remitted the matter for re-adjudication before the Assessing Authority. Assessee was directed to prove that no amount was left payable at the year end and all amounts claimed on which the provisions of Section 194C, 194I and 194J of the Act were invoked had been fully paid by the year end. 27. We have carefully gone through the judgment in the case of Vector Shipping Services Pvt. Ltd. [2013]38 taxmann.co....
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.... and the same would run counter to the interest of co-operative movement. 29. We are afraid, we may not be able to persuade ourselves to accept the aforesaid argument seeking concession or waiver from compliance of statutory obligations on the part of a co-operative entity. In our view, it is hardly any legal ground for consideration. Non-compliance of statutory obligations shall always have their own consequences to flow. Therefore, the instant ground does not advance the case of the assessee any further. 30. Adverting to yet another ground urged on behalf of the assessee suggesting that it did not have the benefit of proper legal advice due to its locational disadvantage, we are of the view that this argument is too feeble to countenance. While canvassing this ground, it is argued by the learned Counsel for the assessee that since the factory is situated in a remote area, it did not have access to competent consultants. Admittedly, assessee was represented by a Chartered Accountant Shri Praveen Ghali before the Tax Authority. In addition, books of the assessee are audited as required under Section 44AB of the Act. Deduction of tax at source under Section 194C, 194I and 194J....
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....r dated January 20, 1970. It is possible that the appellant might have thought that since no notification exempting the appellant from Sales Tax had been issued by the State Government under Section 4-A, the appellant was legally not entitled to exemption and that is why the appellant might have chosen to accept whatever concession was being granted by the State Government. The claim of the appellant to exemption could be sustained only on the doctrine of promissory estoppel and this doctrine could not be said to be so well defined in its scope and ambit and so free from uncertainty in its application that we should be compelled to hold that the appellant must have had knowledge of its right to exemption on the basis of promissory estoppel at the time when it addressed the letter dated June 25, 1970. In fact, in the petition as originally filed, the right to claim total exemption from Sales Tax was not based on the plea of promissory estoppel which was introduced only by way of amendment. Moreover, it must be remembered that there is no presumption that every person knows the law. It is often said that everyone is presumed to know the law, but that is not a correct statement: there....
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....maxim cannot apply to such a case as the present where it appears that there is in the State of Singapore no provision, corresponding, for example, to that contained in Section 3(2) of the English Statutory Instruments Act, 1946, for the publication in any form of an order of the kind made in the present case or any other provision designed to enable a man by appropriate inquiry to find out what 'the law' is." 15. But then in State of Maharashtra v. Mayer Hans George [AIR 1965 SC 722, 742 : (1965) 1 Cri LJ 641 : (1965) 1 SCR 123] Rajagopala Ayyangar, J. referred to the following comment of Prof. C.K. Allen on Johnson v. Sargant & Sons [(1918) 1 KB 101 : 87 LJ KB 122 : 118 LT 95] : "This was a bold example of judgment-made law. There was no precedent for it, and indeed a decision, Jones v. Robson [(1901) 1 KB 673 : 70 LJ KB 419 : 84 LT 230], which, though not on all fours, militated strongly against the judge's conclusion, was not cited; nor did the judge attempt to define how and when delegated legislation became known. Both arguments and judgment are very brief. The decision has always been regarded as very doubtful, but it never came under review by ....
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....publicly made, delegated or subordinate legislation is often made unobtrusively in the chambers of a Minister, a Secretary to the Government or other official dignitary. It is, therefore, necessary that subordinate legislation, in order to take effect, must be published or promulgated in some suitable manner, whether such publication or promulgation is prescribed by the parent statute or not. It will then take effect from the date of such publication or promulgation." 17. In the present case indisputably the mode of publication prescribed by Section 25(1) was complied with. The notification was published in the Official Gazette on the 13-2-1986. As to the effect of the publication in the Official Gazette, this Court held [Srinivasan case [(1987) 1 SCC 658, 672 : AIR 1987 SC 1059, 1067] AIR at p. 1067 : SCC pp. 672-73, para 15] : "Where the parent statute is silent, but the subordinate legislation itself prescribes the manner of publication, such a mode of publication may be sufficient, if reasonable. If the subordinate legislation does not prescribe the mode of publication or if the subordinate legislation prescribes a plainly unreasonable mode of publication, it ....
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....t can be accepted in law. That apart, even after the High Court rendered its decision in Modi Food Products' case [(1955) 6 STC 287] the petitioner did not move the High Court for over several months. There is no satisfactory explanation for that delay. That being so, the High Court was fully justified in refusing to exercise its discretion under Article 226 of the Constitution in favour of the appellant. (Underlining is by us) State of A.P. v. Twin City Jewellers Assn. [2005] 13 SCC 552 at page 554, wherein it is held as follows: "8. It could not be denied that GO No. 303 dated 15-4-1997 was published in the Official Gazette on 23-4-1997. It is settled law that once publication in the Official Gazette takes place, it is deemed to be known to all. Ignorance of law can be no excuse. Once the GO was published, from the date it was published, it became effective. As it became effective from that date, the tax was leviable at the rate of 4%. If some assessing officers, due to their own ignorance or laxity accepted returns at the rate of 2% it did not permit the High Court to ignore the law and continue such laxity to prevail. It must be remembered that the assessing ....
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....cause in our opinion, the legislature could not have intended to bring about any such distinction nor the language used in the section brings about any such meaning. If the interpretation as advanced by the assessees is accepted, it would lead to a situation where the assessee who though was required to deduct the tax at source but no such deduction was made or more flagrantly deduction though made is not paid to the Government, would escape the consequence only because the amount was already paid over before the end of the year in contrast to another assessee who would otherwise be in similar situation but in whose case the amount remained payable till the end of the year. We simply do not see any logic why the legislature would have desired to bring about such irreconcilable and diverse consequences. We hasten to add that this is not the prime basis on which we have adopted the interpretation which we have given. If the language used by the Parliament conveyed such a meaning, we would not have hesitated in adopting such an interpretation. We only highlight that we would not readily accept that the legislature desired to bring about an incongruous and seemingly irreconcilable cons....